Monday, January 18, 2010

Outlook for the Deck and Fence Business 2010

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A better year for Quality Deck and Fence Builders

I hope everyone had a great Christmas season.
Are you ready for the next challenging year? Last year I am sure you noticed things were a little slower for most deck builders. People were holding off on those big purchases due to uncertainty. In the US house prices were falling and folks just didn't want to take the risk in many cases. Locally our trade association saw a 20% decrease in landscape trades, though consensus from our builders was that they were par with 2008 for 2009. The government stimulus had little to no positive effect in Canada that we witnessed.

Since then the stock market has recovered substantially, and some people even made large profits from the rebound. These are all high end clients that may be doing outdoor woodwork.


10% unemployment in the US, 9% Unemployment in Canada,(these numbers don't include those that have given up on looking or whose unemployment benefits have finished.)

What does this mean to deck builders? That all depends where you live. Local unemployment can range between 6-15%, so some areas are better than others.

It means that the less expensive the project--the more competition there will be for every job. Under $5k decks will see deck builders competing heavily for every job.
Fences will be built for low wages typically. I've seen $18/lf in the Toronto area, where the average 2 years ago was $25/lf. When people lose their jobs there are always hundreds of little deck and fence companies starting up--though they rarely last more than a season.

As the job scope increases in complexity and budget you will find more
savvy customers that will insist on paying a little more for talent and
design. There is a glut of work in the high end that didn't get done last year.

Builders expecting to transition into the "high end deck market" will need to bring their "A Game".

Composite Decking

Composite Decking Producers still have not created an honorable warranty that will
include labor and disposal as part of their product warranties, so is on a strict "Signed Waiver" policy. A waiver is signed acknowledging that should the product be defective they will have to pursue the composite company to recoup their labor and disposal
costs, and that presently their composite decking warranty excludes that.

New Taxes for Ontario- Additional 8% PST on
Decks and Fences

In Ontario, with an unemployment rate of near 9% we are heading for a tax
increase May 1/2010. While most governments are thinking stimulus, our
provincial government is afflicting us with an extra 8% to the cost of
what deck and fence builders do. This means that the majority of our
work in the province will likely be booked before May 1, and finished
by July 1 to avoid the tax. After that a large percentage of that
business will be driven underground. Look for more old minivans
building bad fences for $20.00 cash! Obviously there will be more
pressure on the low end, with the high end projects happening as usual.
Like many other places in North America, there is a large glut of high
end work poised to be done in the coming year that people held off on last year.


The internet is getting busier as all businesses try to capitalize on the benefits of traffic, which in turn makes it more difficult to get traffic. Your average 1 year old small
company website will see 30-100 visitors a month if you do everything
right. Make mistakes and you may get no visits.
gets well over 100,000 unique visits a month to our sites most months.

Traffic to our sites increased 20% during 2009. We are forecasting an increase
of 20-30% in 2010 as well.

Phone book advertising and home shows are getting less effective leaving internet and direct
mail as the dominant methods for lead generation.

The phone book crowd is getting a little older, they have nested and
beautified their residences many years ago and their view of the value
of decks and fences is all about price. 30-50 year olds are more likely
to walk to the computer and type what they are looking for into Google.
Google is improving their game as well, penalizing directories and
cheaters using SEO to manipulate their results.

This is one of the advantages. We can cut through the
directories, pay for lead services, and spammy sites and get you into
the listings with your local phone number right on the page.

In Summary

Semi skilled deck builders building for the lowest price will have a very tough time in 2010 with increased competition for fewer dollars. A glut of high end work will help companies like increase total sales and increase pricing slightly because many of our competitors are weakened or out of the business. In Ontario we have never seen so many leads so early in the year from any area, let alone a frozen solid, snow covered Ontario. After July there may be a drought for a couple of months while people grow to accept the new PST tax on decks and fences. All in all it looks like a promising year for Builders.
To find out more about the Builder Group by calling
888 293 8938 or visit this page first. Builder Group

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